Westpac defeats ASIC over debit card

WESTPAC has thwarted the corporate watchdog's attempt to stop it sending out almost one million unsolicited debit cards.

Geoffrey Newman, Wealth Editor

TheAustralianDecember 18, 20098:48am

WESTPAC has thwarted the corporate watchdog's attempt to stop it issuing 900,000 new debit cards to customers who did not ask for one.

The Federal Court yesterday declared the bank had acted lawfully when it began sending customers unsolicited Mastercard debit cards to replace their existing Handycard debit cards, The Australian reports.

Westpac stopped the rollout in May after the Australian Securities & Investments Commission expressed concern that the bank's actions contravened the ASIC Act.

The case hinged on whether Westpac had breached section 12DL of the act, which says a person may not be sent an unsolicited credit or debit card unless the card is a replacement for "a card of the same kind".

It was the first time that section of the act had been considered by a court and opens the way for other banks to follow Westpac's lead.

ASIC argued in court that the new debit card was not the same kind of card under the meaning of the act because it could be used more freely.

In particular, the debit card, unlike the Handycard, did not require a PIN and could be used over the phone or internet.

But judge Steven Rares found withdrawing funds from a customer's account was the defining characteristic of both cards.

"It was not the intention of the act to constrain the relationship between an issuer of a card and its customer by preventing the issuer updating the particular kind of card with the latest version of that kind of card," he wrote in his judgment.

ASIC said yesterday it was considering the judgment and whether to appeal.

A Westpac spokeswoman said most customers sent the replacement card were happy with the extra features.